Behavior-Based Price Discrimination in a Multi-Dimensional Preferences Market

Rosa Esteves (), Qihong Liu () and Jie Shuai

No 4/2016, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: This article is a fir rst look at the profi t and welfare effects of behavior-based price discrimination in a two-period multi-dimensional preferences model. Compared to one-dimensional models, we show that fi rms compete less aggressively in both periods and so new results are obtained. Specifically, under forward looking consumers and two symmetric dimensions, BBPD boosts industry profi ts at the expense of consumers. However, we show that the standard one-dimensional welfare results can prevail under asymmetric dimensions and myopic consumers.

Keywords: Multi-dimension; competitive price discrimination; customer recognition (search for similar items in EconPapers)
JEL-codes: D43 L13 L40 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com and nep-mic
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